Counseling by a third-party counselor is required for all reverse mortgage loans.  The following information is an overview of when counseling must take place and the appropriate information to give to your potential borrower.

What can you do Prior to Counseling - HECM

You are required to refer HECM borrowers to counseling prior to performing any actions that would result in a charge to the potential borrower.  These actions include but are not limited to: ordering an appraisal, ordering a case number, ordering title etc.

You may complete the following prior to Counseling:

- Prospective borrower's application and providing them with estimated costs, sample copies of the note, mortgage and loan agreement
- An indepth explanation of the reverse mortgages available to them
- Provide borrower with a list of Counselors
- May order preliminary Title Search
- Use automated valuation models (AVMs) to perform a preliminary estimation of the value of the property (the AVM does not take the place of the FHA appraisal.  If the lender obtains an AVM, then the costs of the AVM should be included in the origination fee)

If any charges are incurred on the borrower's behalf before the counseling is completed, the charges must be paid by the broker/correspondent.  No file may be submitted to underwriting without the counseling certificate.

Please note that any processing of the loan is prohibited prior to receiving the Certificate of Counseling.